NSW Green Slips to be no-fault

NSW motorists injured in car accidents would no longer have to prove someone else was at fault to claim compensation, under a proposal by the state government.

Currently, under NSW's Compulsory Third Party (CTP) insurance, also known as a Green Slip, a person injured in a crash must establish another person's fault before they can claim benefits for medical costs and economic loss.

Those benefits are in addition to the $5000 available to anyone injured in a crash, irrespective of fault.

Proving fault can lead to lengthy delays in compensation claims and about 7000 injured motorists each year miss out on any benefits above that $5000.

It also increases premiums because of costly legal battles to prove fault, the government says.

NSW Premier Barry O'Farrell says the proposed change to a 'no-fault' scheme will mean injured motorists will be able to access benefits much sooner.

"Too much money is going into legal proceedings while not enough money is going, quickly enough, to those who have suffered injury in car accidents," he told reporters in Sydney on Sunday.

He also said the no-fault system will make Green Slips cheaper for NSW drivers.

"It's about creating a more competitive Green Slip insurance market," he said.

"It's about cutting down on the protracted legal proceedings that currently are part and parcel of the process, that have pushed up costs."

Since 2008, Green Slip prices have grown by about 70 per cent.

NSW drivers pay on average $500 for CTP insurance, about $260 more than drivers in some other states.

The NSW government says a no-fault scheme could reduce Green Slip prices by 15 per cent.

But in January, the government announced prices would rise by 10 per cent, so if the proposed reforms occur, NSW drivers will only be saving 5 per cent on last year's prices.

NSW Green Slips are sold by insurance companies AAMI, Allianz, CIC-Allianz, GIO, NRMA, QBE and Zurich, who take, on average, a 20 per cent cut of insurance premiums for profit.

Victoria already operates a no-fault scheme, while the South Australian government drew up draft legislation for a similar scheme in December.

The NSW government has released a discussion paper on the new reforms and is inviting comments from the public.

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